GST on Foreign Commission

[Sahil Sehgal]

Hello,

I have a sole proprietorship company in New Delhi and receive commission as agent of foreign company. Here is how it work:

• A foreign company, which does not have any entity in India, let’s call it F, appoints me as an agent.
• I visit companies in India who are interested in the products of company F.
• Let’s say company A wants to buy product/services from company F.
• Company A will place order directly with company F and company F will ship to company A.
• Company F will send me commission to my bank account.

Questions Part 1:

• Will I come under the INR 20 lahks per year exemption slab?
• If yes then will it be from 1^st of April 2017 or from 1^st of July 2017?
• If not then do I have to pay GST for commission received before 1^st of July 2017 or I can use the earlier service tax exemption of INR 10 lakhs?

Questions Part 2:

• Let’s say the company F send me US$100 (just a figure) for marketing, like participating in trade show etc
• Out of this US$100 let say US$70 is spend for promotion of company F. So I am left with US$30. So do I have pay GST on US$100 (total amount received) or US$30 (which is left). The US$70 I have spend also includes the GST for Expo or business promotion and have the bill.

Thank you,

Best Regards,

SH

AI Summary

Sole proprietor inquires about GST on foreign commissions; exemption threshold and post-2017 applicability clarified. A sole proprietorship in New Delhi acts as an agent for a foreign company without an Indian entity, receiving commissions for facilitating transactions between the foreign company and Indian buyers. The proprietor inquires about GST obligations, specifically regarding the INR 20 lakh exemption threshold and the applicability of GST on commissions received before and after July 1, 2017. Additionally, clarification is sought on whether GST should be paid on the entire commission amount or only on the remaining portion after expenses. The response indicates that if the proprietor is under the exempted threshold, GST does not apply.